There is no reason why lack of cash should present an insurmountable obstacle to sustained investment by the majority of businesses operating within manufacturing says an underwriter.

There is no reason why lack of cash should present an insurmountable obstacle to sustained investment by the majority of businesses operating within manufacturing and, more specifically, within the engineering sector. This is the strongly held view of Les Porter, Director of the engineering finance division of Close Asset Finance, which will be fielding its full underwriting team at MACH 2004. This means that anyone attending the exhibition will be able to place an order and secure the necessary funding at the same time.

In fact, at the previous MACH exhibition Close Asset Finance advanced GBP 1.5 million as a direct result of this hands-on approach, while receiving enquiries totalling GBP 10.5 million from visitors to the National Exhibition Centre.

'Manufacturing has had a very difficult time of it in recent years,' he says, 'but it can still lay claim to substantial assets in the form of existing equipment and premises.' And it is these assets that can fund new initiatives to help individual companies, irrespective of size, to become more efficient and productive, and by definition more globally competitive and profitable.

The first finance company to be elected as a member of the Manufacturing Technologies Association (MTA) and the European Association of Machine Tool Merchants (EAMTM), Close Asset Finance attributes its success - monthly turnover is in excess of GBP 4 million and growing - to its understanding of the machine tool industry, the industry's customers and the needs of manufacturing as a whole.

A wholly owned subsidiary of Close Brothers, the UK's largest independent investment bank, Close Asset Finance focuses on the significance of a proposed investment and its potential impact on a business as a whole.

The engineering finance division's senior management team's unrivalled knowledge of manufacturing coupled with extensive underwriting experience underpins a flexibility of approach that, since 1998, has enabled many UK companies to benefit from 'making their assets sweat for them'.

By this Porter means that it is usually far more effective to fund, say, the purchase of a new machine with asset finance than to tie up a bank overdraft facility that is of much greater benefit as a source of working capital.

But what the customer really needs, he adds, 'is someone who appreciates that investment is not just about installing a machine.

It's about such things as operator training that need to be done before that machine begins to generate revenue.

And it's about suggesting innovative ways to fund the total investment and enabling the customer to obtain the maximum return for the minimum of risk.' He points out that someone running a small engineering business may find it difficult to put his case across to people who don't understand engineering and this is where specialist knowledge comes into play.

The engineering finance division is able to tailor a capital release scheme to unlock some of the equity within existing machines and other equipment, which can then be used as a cash deposit to support new investment, or existing finance agreements can be restructured to allow new investment to take place while preserving the cash-flow outgoings of a business.

From a new 2500ft2 office on the outskirts of Chester, a 27-strong team offers a variety of innovative and flexible financing solutions, often on behalf of suppliers who prefer their name to headline the options available to their customers.

The objective, says Porter, 'is to encourage people to review the options open to them and to make the most of the opportunities a review will uncover'.

Among these options are hire purchase, finance lease and operating lease agreements that can be tailored such that a minimal deposit or even no deposit at all is required.

All of these options provide Close Asset Finance customers, either directly or indirectly, with fixed monthly payments that are readily affordable.

'We are happy to consider a wide variety of agreement structures,' says Porter, 'taking into account the deposit, the repayment structure required and the term of the loan.

But whatever is proposed, we are aware that it is in neither of our interests for a customer's business to go to the wall.

Brake and clutch manufacturer, FTE Automotive, which at the end of 2002 was the subject of a management buy-out, has acquired Automotive Products (USA), major US clutch actuation company.

World-leading brake and clutch manufacturer, FTE Automotive, which at the end of 2002 was the subject of a management buy-out financed by HgCapital, has acquired Automotive Products (USA), a major US clutch actuation company. With a turnover of $60 million, AP is the leading manufacturer of hydraulic clutch actuation systems in North America. AP supplies primarily the light commercial vehicle after-market sales channel, a business that is highly complementary to FTE's passenger car vehicle manufacturer customer base.

FTE has a reputation for product innovation, particularly with the development of a semi-automatic clutch for gearboxes of premium cars.

Its expansion into North America, together with a rapidly developing business in Asia, consolidates its global presence and position as the world market leader in clutch hydraulics.

The combined company will turn over in excess of EUR 350 million.

Karsten Hartmann, associate director at HgCapital in Frankfurt, said: 'We are delighted to have contributed to the success of the acquisition through our partnership with the FTE management team.

Despite a difficult year in 2003 for the automotive industry, FTE continues its history of profitable growth and has responded to the challenges of an increasingly competitive market place.

'Our continued success in the German market is based on our sector expertise, which allows us to fulfil our ethos of adding value by identifying and realising consolidation opportunities in order to help achieve a company's expansion plans.' Commenting on the acquisition, Wolfgang W.

Bruns, CEO of FTE said: 'This acquisition is another step in our development plans for FTE.

Over the last year HgCapital has worked closely with us to streamline our cost structure and make operational improvements.

An GBP8 million refinancing deal has enabled a consistently profitable manufacturer of safety critical valves and fittings to redeem the entire acquisition finance from a venture capital firm.

An GBP8 million refinancing deal, including GBP 3.5m provided by GE Commercial Finance, (GECF) has enabled Close Brothers Growth Capital (CBGC) to successfully exit its investment in St. Helen's-based Delta Fluid Products Limited (Delta). The advisers on the deal were Dow Schofield Watts LLP.

GECF's financing has enabled Delta's management team to redeem the entire acquisition finance originally provided by CBGC.

DFP is a long established, consistently profitable manufacturer of safety critical valves and fittings with an annual turnover of GBP 12 million.

The management team is led by chief executive Brian Travis, formerly of Delta plc, who has over 20 years experience in this sector.

The team has worked together for over six years and is responsible for developing DFP into one of the leading suppliers of safety critical valves in Europe.

Delta's management team bought the business out of Delta plc in April 2002, with funding from CBGC.

Commenting on the deal, Mark Shackleton, Regional Director at GE Commercial Finance, said: 'GE Commercial Finance is delighted to have been involved in the execution of this interesting deal, and we look forward to supporting Brian Travis and the management team in the ongoing development and growth of the business.' Brian Travis, Chief Executive of DFP, said: 'This has been a very successful deal for us.

In the 21 months since the MBO we have increased sales and profitability and we look forward to continued success in our chosen markets.' Andy Dodd at Dow Schofield Watts LLP added: 'The innovative deal structure, GECF's flexible approach and management's commitment combined well to achieve a successful outcome for everyone.' Garrett Curran at CBGC commented: 'We are delighted with our investment in Delta Fluid Products, which has produced significant returns for our investors in less than two years.

The business outperformed our original investment plan and was ahead of its contractual redemption schedule.

This gave GE Commercial Finance the confidence to back the management team with a refinancing package which enabled them to make us a highly attractive offer to fully exit the business well in advance of our target holding period.'

Capital procurement service is designed to offer a holistic whole life costing for factory equipment and which is based upon the level of 'availability' of that equipment.

Pastor's unique new structure is designed to give users of mission critical assets the comfort of knowing that they only pay for their equipment when it is available for work. In today's competitive environment, the 24/7 culture, the need to produce more for less is a daily battle that faces every business. Developed from work in the Power Generation sector, our structure called Maintained Availability is designed to offer you a holistic whole life costing for your equipment and which is based upon the level of 'availability' of that equipment.

The user is only required to pay for the equipment once it is installed and ready for economic production.

If it does not work due to breakdown, then you are not required to pay for it while it remains that way.

So why would I as a manufacturer find this structure of value and why should I consider it as a solution to my new equipment needs?

The answer lies in a number of directions.

Firstly, I don't have to make any upfront investment in a new asset and then wait for it to be built, delivered and installed.

I only start paying when it's been delivered and accepted.

Secondly, if it breaks down my supplier will be keen to get it up and running in no time, as any downtime is for his account.

Thirdly, I may want to improve my return on capital by having the structure regarded as being 'off balance sheet', thus paying for my assets as I would a car on a contract hire agreement.

Lastly, as I get my equipment in and working and economically productive before I have start making any payments, I can concentrate on my business and not worry about the effect on my working capital or balance sheet.

We, at Pastor, aim to help you get the results you want without the heartache that any new investment can create.

Your Supplier too will be closely involved in the success of your business, a partnership that will benefit you both in the long run.

Nearly a quarter of manufacturing SMEs, loyal to their finance providers, realise they could make more money if they changed finance provider more frequently, but only one in three do so.

Nearly a quarter of manufacturing SMEs (22 per cent) realise they could make more money if they changed finance provider more frequently, however one in three (37 per cent) have never done so, according to research from Standard Life Bank Business Savings. The survey of SME directors found that 88 per cent of those in manufacturing believed that their company actively managed its cashflow. Yet only a third (35 per cent) have a business savings account and, of these, 32 per cent said they rarely used it.

Alan Dring, Head of Sales for Standard Life Bank Business Savings, said: 'The UK's manufacturing SMEs are remarkably loyal, with 96 per cent saying they are loyal to their finance provider.

However their loyalty is costing them money because the average business current account offers an interest rate of 1.9 per cent against a business savings account paying up to 3.60 per cent.

It is concerning to see that such a large proportion of SMEs think they are managing their cashflow well when half have never even changed their finance provider.

To make the most of their cashflow, businesses should review all their suppliers at least once a year, including their finance provider, to see if they can get a better offering elsewhere.

This is not about changing provider for the sake of changing, but about using the right financial products to suit a company's needs.' The survey found that while SMEs know they could make money if they changed finance provider, interest rates were just one of their considerations.

Understanding of their business came top of the list with 95 per cent saying it was critical.

Good customer service came in second (92 per cent said it was key) while a good interest rate actually came third in the list although the majority (91 per cent) thought it was essential.

The British Retail Consortium (BRC) is to release a 'Chinese Simplified' translation of its groundbreaking Global Standard for Consumer Products.

The British Retail Consortium (BRC) will be releasing a 'Chinese Simplified' translation of its groundbreaking Global Standard for Consumer Products on 26 October 2004. This will prove invaluable for companies who are developing a presence in the Far East, enabling them to co-operate more effectively with their suppliers. The BRC Global Standard for Consumer Products, launched in 2003, specifies the requirements of supplying consumer products to the UK retail market.

The Standard is an important initiative in promoting product safety standards across all sectors and providing the basis for companies supplying consumer products to achieve certification.

Kevin Swoffer, BRC Head of Technical Services, said: 'This is a significant development in the BRC Global Standards series as it extends the reach of best practice standards into the important Far Eastern market.

'Retailers recognise the importance of the supply of consumer products from China and the Far East and we are in no doubt that the translation of the Standard will help businesses who are increasing their operations in the region.

'The BRC Standard for Consumer Products provides the mechanism by which suppliers will be assessed and their competency measured against a common but appropriate standard.

It is envisaged that suppliers will act positively, as was the case with the BRC Global Standard - Food, where there has been significant evidence of continuous improvement and commitment to meet customer requirements.'

Predicting 2% growth in the UK's manufacturing sector, a UK bank is making GBP 500 million available to support growing UK businesses over long-term.

Barclays has underlined its long-term commitment to UK manufacturing by announcing GBP 500 million of lending to support growing businesses within the sector. Barclays predicts that the UK manufacturing sector will grow by up to 2 per cent in 2005 driven by gradual improvements in order books and the ability of many UK manufacturers to remain competitive on the global stage, through increasing levels of research and development and improved technology and innovation. Reflecting the diverse nature of the industry Barclays lending to manufacturing businesses is expected to be well spread across all regions of the UK and across industry sub sectors, including: pharmaceuticals, chemicals, aerospace, biotechnology, electronics, automotive, food production and medical equipment.

Andy Martin, national director for manufacturing at Barclays said: 'A strong manufacturing sector is good for the health of the UK and a determinant of its position in the global economy.

Working on a daily basis with many UK manufacturers, I see a large number of well managed companies which have both the desire and the ability to expand and grow if the right finance is available.

'I believe that many UK manufacturers are responding positively and proactively to the challenges they have faced in recent years such as rising raw material and energy costs, the strength of sterling against the dollar and the emergence of Asian competitors.

In this context I believe that our announcement of financial support for further development within this sector is well timed.' Sir Digby Jones, Director General of the Confederation of British Industry, said: This is a welcome vote of confidence in UK manufacturing and a timely boost to the sector's financing and investment needs.

If the UK's manufacturing base is to grow then we need the support of banks like Barclays.'

'Credit hound' solves the cash flow problem for SMEs by launching a timely solution to the seemingly ubiquitous problem of credit control management for small businesses.

Draycir is launching a timely solution to the seemingly ubiquitous problem of credit control management for small businesses. Credit Hound, an easy-to-use intelligent software package will soon do all your credit control management for you and remove all the stress and uncertainty from the debt collection process. The end result is better organised, consistent systems enabling small business to collect debt quicker and improve that all-important cash flow that can potentially cripple SMEs if it's left unchecked.

Draycir will preview the innovative new software package at the Sage Visions 2004 Expo to be held at the Hilton Metropole in London on 2 November.

Visit Draycir at Stand 53 at Sage Visions and ask for Robert Ball or Richard Reaveley who will be pleased to show you the benefits of Credit Hound.

Version 1 of Credit Hound will be available early in 2005, with entry level prices for the smallest companies likely to be as little as a few hundred pounds.

Credit Hound has been designed to work with a number of accounting packages including Sage Line 50, Sage Line 100 and Sage MMS, which is expected to be the core market for the software - hence the preview at Sage Visions.

Full pricing packages will be available from Draycir in the new year.

Draycir director, Robert Ball, commented: 'Credit Hound offers a total credit control management system for SMEs from only a few hundred pounds.

Millions of SMEs currently suffer at the hands of the larger corporates' credit control policies; major companies have sophisticated systems to monitor, control, and recover debt and at the same time they may also delay payments to smaller firms with disorganised credit control policies.

The typical SME is then left having to pay its bills faster than it can get cash in from its own customers.

Hence one of the primary reasons for SME business failure is inadequate cash flow leading to a higher risk of bad debt.

'Credit Hound gives the SME the ability to punch at a much higher weight in terms of its credit control management systems, providing much of the functionality and benefits of the major corporates' credit control management systems, at a fraction of the cost.

We believe this is the first mass-market product of its type and functionality aimed at the SME sector.' Credit Hound is designed to be intuitive, flexible, and scaleable.

It has been developed using the latest Microsoft.NET technologies which brings a familiar look and feel to the software.

Credit Hound is a complete credit control solution offering information rich chasing screens, instant letter and copy invoice dispatch along with payment trend analysis, dispute system and full management breakdown.

Its comprehensive features, analysis and reporting set it a breed apart.

The innovative 'Self Chasing' feature of Credit Hound will automatically work in the background on your PC and alert you to the fact that an invoice is due; a 28 day letter is due; a statement or final reminder is due, etc etc The user then has the option to manually override the system - eg: to talk to a key client prior to sending a credit control letter - or to allow Credit Hound to do the rest and send the appropriate chasing e-mails, faxes, or letters as required.

Ball added: 'Most automated and manual credit cycles will only run once a week or once a month.

Credit Hound will automatically alert the user the second the invoice becomes payable or overdue, saving valuable days or weeks in the credit control process, improving cash flow, and identifying problem debt much faster.'

Not the best time for UK companies to take risks, but a US credit 'guru' says it is a good time for companies to take a look at radical ways to improve their margins.

Taking on greater risk of bad debt could seriously enhance your profits, according to Abe WalkingBear Sanchez - a US credit guru speaking at a seminar in Birmingham last week, hosted by global credit insurer, Atradius. With economic conditions still tough for many UK companies, and competition in all sectors becoming ever sharper, some firms are still battening down the hatches and take fewer risks. But this is a good time for companies to look at radical ways to improve their margins, argues WalkingBear.

'The trick is to learn how to control bad debt, not run scared of it,' he said.

'Without risking bad debt, however, you will miss out on the opportunity of new sales'.

'Bad debt is not always bad - it all depends on whether your product value at the time of sale is low.' Examples of products with a low value at the time of sale include: * low-cost products sold at a large mark-up.

* slow turning inventory.

* products with a short shelf-life.

* empty aeroplane seats after the doors have closed.

* empty freight trucks on the return delivery journey.

* businesses with unused capacity.

If your business has low product value at the time of sale, it could be worth considering taking on higher risk customers to make the sale.

The potential for profit outweighs the danger of loss.

'For example, imagine you have a company with sales of GBP 10 million, with unused capacity,' continued Abe WalkingBear Sanchez.

'Your fixed costs are 50%, or GBP 5 million'.

'Your variable costs - including cost of goods and sales commissions - are 45 per cent, or GBP 4.5 million'.

''It is easy to see what the impact would be on the bottom line if you could book another GBP 1 million sales.

But what if that means having to accept offers from more risky customers?

Well, even if 10 per cent of the extra sales had to be written off as bad debt, and you still incurred the 45 per cent of variable costs, if you have low product value at the point of sale in the form of unused capacity, there are no extra fixed costs.

So, the company would still have a net profit of GBP 450,000 - 45 per cent.

This is an improvement on the profit of 900 per cent.

Worth taking the extra risk?

I think so.' The seminar - 'Credit Management: From Back Office to Corner Office' - was held in central Birmingham on Tuesday 8 March'.

'It was attended by 100 UK financial directors and credit professionals'.

'Its aim was to challenge the traditional view of credit management as just another accounting function, and examine its changing role as a central business strategy, a sales support function and an effective means of boosting profitability.

'Trade debt can account for as much as 40 per cent or more of a company's assets, and British businesses spend in excess of GBP 12 billion a year on credit management,' commented David Fain, Atradius' Regional Commercial Manager.

'Yet it is often the most misunderstood, under-utilised and undervalued area of business'.

''Smarter companies, however, are starting to think about how to use credit management more effectively to boost their bottom line and increase their sales'.

'But it's not just about tightening up credit management procedures to keep the cash flowing and improve profitability'.

'It's also about turning the traditional view of credit on its head, and starting to view it as a positive, profit-driving, sales support rather than a risk-averse accounting function.' Abe WalkingBear Sanchez is well known in the United States as the founder and leading proponent of the profit-centred credit movement.

Atradius has worked with him for the past 18 months, bringing him to the UK for the first time in October 2003.

Since then he has addressed several conferences and seminars in the UK and Europe, bringing his, sometimes controversial, views on credit to new audiences.

Abe is renowned for his vision and hard-hitting style, and he brings life and energy to a critical business function whose true potential has yet to be realised by most businesses.

Machine tool buyers increasingly turn to external finance so that they retain cash while spreading the costs, structure repayment profiles, or use low cost start up schemes.

Providing customers with the best financial package when your machines range in price from a few tens of thousands up to several hundred thousand pounds calls for a variety of credit solutions. With over 20 years experience Yamazaki Mazak U.K. is ideally placed to provide the answers.

'The trend,' says Yamazaki Mazak's Sales Director, Tony Saunders, 'is for customers to increasingly turn to external finance for their machine purchases'.

'The benefits are that they retain cash within the business while spreading the costs, can keep outlay off balance sheet if required, structure repayment profiles, or take advantage of low cost start up schemes'.

'The predicted trend for 2005 is further increase.' Yamazaki Mazak works in close co-operation with Hitachi Capital (formerly IEF) in providing a multitude of finance packages, whether for outright purchase or leasing.

Other elements that can be built into a tailor-made package include deferred repayment start up, front or back end balloon payments, VAT period matching and operating leases'.

''In working with Hitachi Capital we can provide tailor-made solutions to match customers' individual requirements,' says Saunders'.

''Hitachi Capital personnel have a deep understanding of the machine tool business and operate in complete confidence with the customer to arrange the most appropriate finance package'.

Adal Group has acquired a specialist metal cladding panel supplier - Guilform - with backing from Lloyds TSB Commercial Finance, which providing GBP 5 million of asset based lending facilities.

Adal Group ('Adal') has acquired specialist metal cladding panel supplier Guilform, substantially increasing its presence in the market place. The deal further cements the Group's position as the largest specialist aluminium extruder in the UK. Adal Group is a manufacturing and technology company with UK factories in Essex and Hertfordshire, but it is publicly listed in the USA and has an office in New York.

Established in 2003, the company was formed to bring together a range of outstanding added-value aluminium manufacturers and products to meet all aluminium needs from one source.

It has significantly expanded over recent years due to a number of acquisitions, including Seco Aluminium and WHJ Fagg.

Its acquisition this year of St Albans-based Guilform will help Adal develop a profitable range of architectural products and increase its presence in the USA.

As with the previous acquisitions, Adal received backing from Lloyds TSB Commercial Finance, who funded the acquisition by providing GBP 5 million of asset based lending facilities.

Nicholas A Shrager, chairman and CEO of the Adal Group, says, 'Guilform is a leading supplier of aluminium based architectural products, and we are delighted that they are now part of the Adal family.

In addition to our acquisitions of Seco and WHJ Fagg, we hope to use this strength to expand into the USA.

We feel that the time is right for Adal to attack the US market, having become a US public company in 2004.' On Adal's relationship with Lloyds TSB Commercial Finance, Shrager enthused, 'We like to think of Lloyds TSB Commercial Finance as being partners in our business.

When trusting someone with an important aspect of your business such as funding, it is imperative that you have a strong, dependable relationship, and we absolutely have that with Lloyds TSB Commercial Finance.

We have worked with them for a long time and established a good rapport, and, as we grow, I am sure our partnership will continue to flourish.' Commenting on the acquisition, Mike Whitby, senior client manager at Lloyds TSB Commercial Finance said, 'We have worked with the Adal Group for a number of years now, and have financed all of their acquisitions.

We have an excellent relationship with the Adal team.

It is a well-structured and ambitious group and we have been able to assist them by offering facilities tailored to their debtor, stock and machinery assets.

With our offices in Germany and New York we are well placed to help them to achieve their international growth plans.' * About Lloyds TSB - Lloyds TSB Commercial Finance is a UK specialist in the provision of asset based finance.

The company tailors financial solutions to individual businesses and helps clients maximise the cash available against all their assets.

A free guide called 'In The Know' shows how to discover what UK business grants are available for start-up, H and S responsibilities and chasing bad business debts.

How do you discover what business grants are available for your start-up company? Where do you get advice on your health and safety responsibilities towards your employees? And who do you turn to for help if your customers will not pay their bills?

These are just some of the important questions that most businesses will face at some point - but very few company owners will have all the answers.

Now the solutions to these problems and many more can be found in a free guide called In The Know, produced by global credit insurer, Atradius.

In The Know is designed to show firms how they can use business intelligence to help them grow and become more profitable.

It focuses on the three key areas of finance, sales and legal responsibilities, offering an overview of each topic plus tips on where to find more detailed advice.

Atradius believes that the guide will be invaluable for any size of organisation, from a start up company to a firm looking to expand or improve its business processes.

Will Clark, Atradius' regional director for UK and Ireland, NAFTA and Australasia, explains: 'Successful organisations are started by people with good ideas and expertise in a particular area.

But even the smartest bosses don't know everything about being in business, and they are often too busy running a thriving company to be able to research every aspect of commerce in detail.' Clark adds: 'However, it is essential to get to grips with the important issues that can either help you develop your business, such as funding and finding new customers, or, which could cause you headaches if you are not up to speed, like public liability or employee relations.

'There is lots of valuable information freely available and the Atradius In The Know guide will help firms find the advice and support they need.

It has been compiled by our own business experts from the wealth of data that Atradius has its fingertips - and the guide is completely free.' In The Know covers three main areas of business: * Finance - offering tips and resources on topics including finding grants and other funding, improving your cash flow and protecting your business against debt.

* Sales - which looks at creating a business plan, marketing and promotions for your business, finding news customers and increasing your sales.

* Legal Responsibilities - with tips on where to go to get legal advice, training for you and your staff, as well as improving employee relations.

Atradius credit insurance not only covers customers for up to 90 per cent of any bad debt, it also carries out initial credit checks on new customers and provides market intelligence on over 45 million individual businesses, industry sectors and markets around the world, with offices in 40 countries providing direct local experience and knowledge.

Credit insurance is ideal for any size of business, from multi-nationals through to SMEs and start-up businesses, and policies are available to cover trading risks in the UK and internationally.

Atradius also provides debt collection services in the UK and overseas, securing repayment in the most efficient and effective way possible.